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ORGANIZATION PRINCIPLES

ORGANIZATION PRINCIPLES. W. Frank Dell II, CMC September, 2003. AGENDA. INTRODUCTION STRUCTURE ROLES & RESPONSIBLITIES MOTIVATION. Objectives. Introduce elements of organization Bridge the theory and reality gap Identify common problems and issues. Definition.

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ORGANIZATION PRINCIPLES

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  1. ORGANIZATION PRINCIPLES W. Frank Dell II, CMC September, 2003

  2. AGENDA INTRODUCTION STRUCTURE ROLES & RESPONSIBLITIES MOTIVATION DELLMART & COMPANY

  3. Objectives • Introduce elements of organization • Bridge the theory and reality gap • Identify common problems and issues DELLMART & COMPANY

  4. Definition “A body of persons grouped for some end or purpose” DELLMART & COMPANY

  5. History of Organization • Tribal Chief • Division of labor • Warrior • Hunter • Support • Report to Tribal Council • Birthright Leader DELLMART & COMPANY

  6. Element - People • Employees are the greatest asset of every company • Types • Striving to get ahead • Takes pride in work • Puts in time • A great plan without good people is useless DELLMART & COMPANY

  7. Element - Management • Organizations are built around management • Management skills • Inherent • Learned • You’re not a manager until you hired and fired someone • A good manager is someone who is right 51% of the time • Traits • Common sense • Right and wrong values DELLMART & COMPANY

  8. Element - Culture • Definition – “The sum total of ways of living built up by a group of human beings and transmitted from one generation to another” • Types • Motherland • Company DELLMART & COMPANY

  9. Element - Knowledge • Types • Education • Experience • Education • Accounting & Finance • Marketing • Information Technology • Human Resources • Distribution DELLMART & COMPANY

  10. Factor - Size DELLMART & COMPANY

  11. Factor – Span of Control Old – 6 to 1 New – 11 to 1 DELLMART & COMPANY

  12. Issue - Silo DELLMART & COMPANY

  13. Issue – One on One DELLMART & COMPANY

  14. People Vs Structure • Build structure around employees • Management talent • Span of Control • Knowledge DELLMART & COMPANY

  15. AGENDA INTRODUCTION STRUCTURE ROLES & RESPONSIBLITIES MOTIVATION DELLMART & COMPANY

  16. Board of Directors • Senior most advisors • Maximum independence • Diverse background and experience DELLMART & COMPANY

  17. Managing Director • Chief Executive Officer • Strategy execution • Generalist DELLMART & COMPANY

  18. Management Team • Core requirements • Merchandising • Store Operations • Accounting & Finance • Administration (Human Resources) • Optional – Logistics/Distribution DELLMART & COMPANY

  19. Expanded Management Team • New direct reports • Human Resources/Personnel • Information Technology • Real Estate • Treasurer (public company) • General Counsel DELLMART & COMPANY

  20. Executive Board • Board of Directors – Overall responsibility including strategy • Executive Board – Daily operating responsibility including tactics • Similar to the Management Team approach DELLMART & COMPANY

  21. Line Merchandising Store Operations Logistics Staff Accounting & Finance Human Resources Information Technology Legal Loss Prevention Real Estate Treasury Line Vs Staff DELLMART & COMPANY

  22. Marketing & Merchandising • Marketing – “the total of activities by which transfer of title or possession of goods from seller to buyer is effected, including advertising, shipping, storing and selling” • Merchandising – “to plan for and promote the sale” DELLMART & COMPANY

  23. Marketing • Competitive assessment • Customer identification • Research • Frequent Shopper program • Corporate image • Advertising DELLMART & COMPANY

  24. Merchandising Issues • Number of vendors • Number of items • Number of transactions • Information Technology support • Promotional strategy • Warehouse Vs Direct Store Delivery DELLMART & COMPANY

  25. Merchandising Models • Buyer • Category Manager • Merchant Prince DELLMART & COMPANY

  26. VP Merchandising Buyer Buyer Buyer Administration Advertising Retail Pricing Space Buyer Organization DELLMART & COMPANY

  27. Buyer Time Allocation DELLMART & COMPANY

  28. Buyer Alignment Category Vendor DELLMART & COMPANY

  29. Category Elements • Manage the category as a strategic business unit • Develop strategic category plans based on category goals, competitors and market conditions • Determine price, merchandising, promotion and product mix • Collaborate with suppliers DELLMART & COMPANY

  30. Category Process Category Definition Category Role Category Assessment Category Review Category Scorecard Category Strategies Category Tactics Plan Implementation DELLMART & COMPANY

  31. Category Organization Product Supply Space Allocation Marketing Services Category Management Price/Data Integrity Retail Merchandising Category Analysis Advertising Coordination Retail Pricing Allowance/Cost Control DELLMART & COMPANY

  32. Category Management Reality • Lacking education and training • Ignoring process • Selling Category Captain position • Result is Super Buyer DELLMART & COMPANY

  33. Store Operations Issues • Alignment - format Vs geography • Training – support Vs Human Resources • Technology - support Vs Information Technology DELLMART & COMPANY

  34. Store Operations Organization How many stores per district ? DELLMART & COMPANY

  35. Store DELLMART & COMPANY

  36. Logistics Issues • Capital – own Vs lease • Management – operate Vs 3rd party • Replenishment – Logistics Vs Merchandising • Production – warehouse Vs direct report DELLMART & COMPANY

  37. Logistics Organization DELLMART & COMPANY

  38. Finance & Accounting Issues • Payroll – Finance Vs Human Resources • Computers – Finance Vs direct report • Control – checks and balances DELLMART & COMPANY

  39. Finance & Accounting Organization DELLMART & COMPANY

  40. Human Resources • Issues • Payroll • Training • Culture DELLMART & COMPANY

  41. Real Estate • Issues • Own Vs rent • Remodeling • Equipment selection DELLMART & COMPANY

  42. Loss Prevention • Issues • Safety • Shrink DELLMART & COMPANY

  43. Dual Management • Dotted line reporting • Effective • Policy • Procedures DELLMART & COMPANY

  44. AGENDA INTRODUCTION STRUCTURE ROLES & RESPONSIBLITIES MOTIVATION DELLMART & COMPANY

  45. Board of Directors • Quarterly meeting • Responsibilities • Strategy approval • Budget approval • Audit • Executive compensation • Treasury • Shareholder communication DELLMART & COMPANY

  46. Management Team / Board • Monthly meeting • Responsibilities • Strategy development • Budget development • Daily operations & execution DELLMART & COMPANY

  47. Department Interact DELLMART & COMPANY

  48. Responsibilities • Merchandising – Supplier to shelf • Distribution – Purchase Order to store • Store – Receiving to customer • Accounting – All transactions DELLMART & COMPANY

  49. Associate Communications • Training & Educations (how) • Directions (what & when) • Technology interface • Protocol • Methodology DELLMART & COMPANY

  50. Control Components Budget Standard Operating Procedure Goals Job Description DELLMART & COMPANY

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